Understanding Probate can be tricky, but we’re here to answer all of your questions. One question that frequently comes up is whether or not Probate is always a necessity.
In this article, we'll explore the situations in which probate is unnecessary in Australia.
What is Probate?
Probate is the process of legally administering a deceased person's estate. It involves the validation of a Will, if one exists, and the distribution of assets to the deceased person's beneficiaries.
Probate is often necessary in order to ensure that a deceased person's assets are distributed in accordance with their wishes and that any debts or taxes are paid.
When is Probate needed?
For an executor to distribute a deceased person’s assets, in most cases they will need to apply for Probate. Many businesses and residences that hold assets such as banks, superannuation, insurance and utilities will need a Grant of Probate to release any funds or cancel accounts.
So, when is Probate unnecessary in Australia?
There are a few specific instances where applying for Probate isn’t necessary. Below are examples of when you don’t need a Grant of Probate.
1. Small estates and low-value assets.
If the deceased person's estate is small and does not exceed the state's threshold, Probate may be unnecessary. The threshold varies from state to state, so it's important to check the rules in your state. In most cases, if the estate is worth less than $100,000, probate may not be necessary.
However, it is necessary to establish that you would be the person administering the estate. If the estate is held with a financial institution, you will need to provide them a certified copy of the Will and a death certificate to transfer low-value assets.
If you’re unsure if these circumstances apply to you, it’s best to talk to a solicitor about your personal circumstances.
2. Jointly owned assets.
Assets that are jointly owned with the right of survivorship may pass directly to the surviving joint owner without the need for probate.
If the deceased person’s home is held by a surviving joint owner, for example a partner or spouse, they become ‘joint tenants’. In this case, joint tenancy comes with the ‘right of survivorship’. This means that when one joint owner dies, their interest in the property asset passes to the surviving joint owner.
As a result, this property asset does not form part of the deceased estate for distribution to beneficiaries. Other assets that could be jointly owned include bank accounts and vehicles.
3. Assets with assigned beneficiaries.
Assets that already have a designated beneficiary, such as life insurance policies and superannuation, may pass directly to the beneficiary without the need for Probate. These assets are handled separately and do not form part of the deceased’s estate.
If the deceased’s assets are held in a trust, Probate may not be necessary. The trust document will specify how the assets should be distributed, and the trustee will be responsible for ensuring that the assets are distributed in accordance with the trust's terms.
This is because any assets held in a trust also do not form part of the deceased’s estate, therefore Probate may not be necessary to distribute the assets.
Intestacy occurs when someone dies without a Will. As there is no Will, a Grant of Probate is not necessary. However, the deceased’s next of kin will need to apply for Letters of Administration to deal with their estate and finalise their affairs.
Letters of Administration is a similar process to Grant of Probate, however without a Will or executor, the courts will need to appoint an administrator who will have the legal authority to administer the deceased’s estate and assets.
Final thoughts on the need for Probate in Australia.
Probate is essential for many deceased estates in order to process and distribute assets, but it’s not necessary for everyone. Understanding when you might not need Probate can make handling a deceased estate much easier, especially in a time of grief.
When Probate is needed, it can end up being a lengthy and expensive process, but it doesn’t always need to be. At Bare, our affiliate law firm Bare Law can help you arrange Probate and will fast-track and simplify the entire process. Click the link below to learn more about our services or give our friendly team a call on 1800 959 371.